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Johannesburg - South Africa’s roadbuilding industry almost came to a halt on Friday, because absolutely no bitumen was to be found anywhere.
Months of attempting to find a solution for the ongoing shortage of the petroleum product have proved fruitless.
Meanwhile thousands of contractors, many of whom are small contractors, are struggling to cover the costs of unproductive workers and machinery. What is more, they can’t claim payment as they are unable to finish off their projects.
Phillip Hechter, managing director of Much Asphalt, the country’s biggest asphalt manufacturer, said the situation is the worst in his 30 years in the industry. Hechter also chairs the Southern Africa Bitumen Association (Sabita).
Bitumen is a by-product of refineries that produce petrol, among other things, and there are only four suppliers in the country. Roadbuilding projects in Namibia, Zambia and Botswana receive their bitumen from South Africa as well.
The situation has reached crisis proportions after the re-opening of Durban's Sapref refinery was postponed for technical reasons after its annual shutdown for maintenance. According to correspondence to its clients, the refinery will now re-open on October 20 or 25.
Engen’s Enref refinery in Durban was to have shut down for maintenance on Saturday, but closed on Tuesday following a fire. It is expected to re-open only at the end of November.
The Caltex refinery in Cape Town, said Hechter, produced about 400 tonnes of bitumen on Wednesday, which would keep road builders going for less than half a day. By Friday evening the refinery would apparently have had a small amount available, but with a restricted amount per customer. Much Asphalt would have received only seven 32-tonne shipments for distribution distribute among its branches.
Total’s Natref refinery in Johannesburg informed its customers that it was experiencing a critical shortage owing to the increased demand.
Hechter said he found it baffling that Engen had exported a shipload of bitumen early this month, despite the critical domestic demand. Engen declined to respond to enquiry on Friday.
Hechter said large companies might pull through the crisis, but the survival of thousands of small businesses could be threatened by cash-flow problems arising from the crisis.
Several meetings have been held with representatives of the South African National Roads Agency (Sanral), National Treasury and the Department of Energy. It was proposed that bitumen be declared a strategic product and that refineries be forced to hold minimum stocks.
On Friday the Department of Energy could not be reached for comment, but Hechter said the meetings had so far been unfruitful.
Much Asphalt and other parties are considering importing a shipment of bitumen, but can do so only if the 10% import duty on it is set aside.
Hechter said in the long run bitumen would have to be imported. He said little relief is in sight until March or April next year, as the Caltex refinery in Cape Town will be shut for maintenance early next year. This means the country will lose virtually an entire roadbuilding season. Most roadwork takes place in the summer months, especially in areas with winter rainfall.
- Sake24
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